Highlights for the six months include:

• DPS of 69.04 cents, on-track for full year guidance of 5% – 7% growth
• Distribution pay-out ratio of 100%
• NAV per share up by 2.7% in the six months to R16.93
• R700 million of disposals completed
• Loan-to-value of 37.2%
• R3.4 billion of cash and undrawn facilities
• Preferred bidder for JSE-listed FMCG Group for the development of a c.90 000m² facility in Riverfields
• 27.0 MW of solar capacity, with three additional PPAs signed

Specialist logistics REIT, Equites Property Fund Limited, today announced strong financial results for the half year to 31 August 2025, underpinned by robust property performance. The Group highlighted DPS of 69.04 cents, up 3.8% and reaffirmed distribution guidance of 140.62 – 143.29 cents per share for FY26. The Group’s portfolio value increased from R27.7 billion in February 2025 to R28.3 billion in August 2025. This is primarily due to further acquisitions of R146 million, ongoing development expenditure of R327 million, and a substantial 4.0% like-for-like fair value uplift on the income-producing portfolio. This growth was offset by further property disposals during the period, amounting to R668 million.

Operational momentum was maintained, with six leases concluded across c.107 000m². The like-for-like portfolio rental growth was 5.1% and is expected to revert to 5.5% to 6% per annum once the impact of rental reversions during the period is in the base. By maintaining tight control over administrative costs and optimising the cost of debt, Equites aims to deliver consistent distribution growth sustainably ahead of SA CPI over the long term.

Equites CEO, Andrea Taverna-Turisan, said: “We are pleased with the strong momentum generated in our portfolio during the period. The overall quality of the portfolio has improved through the disposal of older, non-core assets and the addition of new, ESG-compliant properties. Equites’ portfolio fundamentals are also exceedingly robust, with a WALE of 14.1 years, a weighted average escalation by GLA of 6.1%, and 99.1% of rental income derived from A-grade tenants. The portfolio had a low vacancy of 1.5% at period-end, which has subsequently largely been let. These fundamentals all support a high degree of income certainty over a sustained period.”

 The Group’s LTV ratio was 37.2% as of 31 August 2025, and its all-in cost of debt in SA decreased by more than half a percentage point since year-end to 8.3%. Equites was able to capitalise on its lower LTV to repurchase shares amounting to R130 million. The shares were repurchased at a weighted average price of R13.82 per share, representing a 16% discount to reported NAV per share at the time.

R668 million of disposals during the period

Equites has commenced a staged disposal of its UK assets, given the maturity of the UK portfolio and the compelling opportunity to redeploy capital within SA. Once the disposals are concluded, the proceeds will be deployed into state-of-the-art, ESG-compliant logistics developments in key locations in SA, secured by long-term leases.

The Group concluded the sale of three income-producing assets in the six months. SA disposals comprised a specialised asset not considered core, located in Bellville, and an asset in Philippi. Equites also disposed of a land parcel in Saxdowne for R20 million. In the UK, the Group sold its DPD asset in Burgess Hill for £17.65 million, reflecting a 5.0% yield. With the exception of Philippi, these assets were classified as held-for-sale at Feb-25. Remaining disposals relate to the subsequent sale of companies forming part of the ENGL disposal.

While there is strong interest across the portfolio of assets earmarked for sale, management remains disciplined and will only conclude transactions at levels that are both fair and financially optimal for the Group.

Strong growth in the South African market

Demand for prime logistics assets in SA continues to surpass supply, driven by retailers upgrading their supply chains to stay competitive, third-party logistics providers expanding their fulfilment networks to meet surging e-commerce volumes, and FMCG operators investing in modern facilities to boost delivery efficiency. On the supply side, development remains constrained by a shortage of bulk land plots and persistently low vacancy rates. The resulting supply-demand imbalance has led to an approximately 7.3% year-on-year increase in nominal gross rentals for new logistics developments, indicating ongoing upward pressure on rentals, especially for well-located, A-grade facilities.

Market appetite has strengthened considerably, with Equites receiving inquiries totalling approximately 268 000m² for new developments as well as existing facilities over the last 18 months. Equites has commenced two new speculative developments in Meadowview and Riverfields to capitalise on the rising demand. The Meadowview facility is currently under offer, and a lease has already been finalised at Riverfields, prior to practical completion.

Following a competitive RFP process, Equites was appointed as the preferred bidder to develop a state-of-the-art c.90 000m² logistics facility for a JSE-listed FMCG Group at Riverfields in Gauteng. This landmark project underscores Equites’ ability to secure and deliver large-scale developments for blue-chip clients. The project will be undertaken in a strategic partnership with Tridevco (Pty) Ltd, a prominent landowner in the area. It will provide the partners with the opportunity to jointly unlock further land parcels in the area. Development activity during the first half of 2026 totalled R0.5 billion and is expected to increase significantly with the completion of this facility by June 2027.

With access to prime land, extensive development expertise, and strong ties to major retailers, 3PLs, and FMCG operators, the Group is well-positioned to address the current supply gap while expanding its portfolio of high-quality assets.

Strong debt profile

The Group has R14.2 billion in debt facilities with a weighted average debt maturity profile of 3.2 years and R3.4 billion in cash and undrawn facilities. The Group consistently reviews its capital structure, ensuring that prudent funding and liquidity risk management are balanced with the ability to capitalise on new opportunities as they arise. Equites expects to sell five income-generating assets, with a sixth asset expected to follow in early 2026. The remaining land in the UK is expected to be sold within the next 18 months, generating significant cash. Proceeds will be used to pay down UK debt, with surplus capital reinvested into SA at accretive yields. These actions are projected to lower the Group’s LTV ratio to around 25%, creating significant headroom for the Group to pursue substantial development over the next three years.

The Group’s weighted average cost of debt in SA is 8.3% and 97% of debt maturing beyond one year is hedged. The Group has appreciably reduced the all-in cost of debt due to its continued strong performance in the debt capital market, enabling the replacement of maturing debt with significantly lower-cost new debt facilities.  The Group receives strong support from lending institutions, with roughly one-third of all debt sourced from more than 20 different non-bank financial institutions.

Equites’ sustainable development initiatives are now also growing alternative revenue streams

Sound environmental stewardship is a crucial aspect of the Group’s strategic positioning and remains at the core of its operations.

Equites’ strategy for solar PV systems aims to provide tenants with a comprehensive, maintenance-free solution through power purchase agreements (PPAs), which fulfil their energy needs while generating alternative revenue for the Group. The solar generation capacity of the portfolio increased to 27.0 MW, and the number of buildings with solar PV rose from 32 to 37. Six new solar PV systems with capacity of 1.2 MW will be completed during 2H26, and the Group is aiming to install an additional 5 MW over the next two to three years. Six PPAs concluded in the previous financial year contributed to revenue during 1H26, and a further three PPAs concluded during the current period will contribute to revenue during 2H26. The Group plans to increase wheeling capacity by engaging with municipalities, focusing on large-scale installations across entire roof spaces, and capitalising on rates of return well above typical property returns. This strategy will also help the Group meet its SBTi emissions targets and contribute to energy security in SA.

Green certified buildings comprise over 616 422m² of the portfolio, with an additional 243 640m² in the process of certification to meet the highest environmental standards. Equites has also launched several strategic initiatives to enhance water efficiency across its properties and has obtained municipal approval to install an integrated biological wastewater treatment plant, which will significantly decrease reliance on existing water infrastructure. As the first of its kind within the portfolio, this technology is expected to play a crucial role in strengthening water security and is projected to deliver both environmental and financial benefits over the medium to long term.

A robust outlook for the remainder of the financial year

The Board reaffirms its FY26 earnings guidance, targeting a range of 140.62 – 143.29 cents per share, which translates into an increase of between 5% – 7%, as compared to the previous year. This outlook is supported by the strong performance of the underlying portfolio, with SA delivering above-inflation like-for-like rental growth, positive rent reversions in the UK, and the continued tightening of debt costs during the period.

Taverna-Turisan, ended: “The Group remains confident in its ability to drive sustainable value creation for shareholders over time, underpinned by an impeccable property portfolio as well as structural tailwinds in the sector. The Group is well-capitalised and maintains a low exposure to prevailing market risks, positioning it favourably in the current economic landscape. Our track record of developing world-class facilities for our clients continues to unlock opportunities for the fund to grow.